Pressure mounts as UK growth slips

axiafx vs banks

A barrage of weak European data yesterday morning saw GBPEUR spike as markets opened. Confirmation that both German and French private sectors are struggling saw European risky assets open in the red. Although the German private sector shrank at its fastest rate in the last 3 years, they could take reassurance from the fact that Q1 GDP was confirmed at 0.5%. A position not shared by France, whose Q2 GDP will likely bear the brunt of this slowdown in manufacturing. The only saving grace was UK GDP, that saw GBPEUR fall short of its 1.25 resistance level.

As expected, UK Q1 GDP was revised downwards to -0.3% pushing the UK even deeper into recession. While there was widespread expectation that the figure would fall, it didn’t make for good breakfast table chat in 10 Downing St. It doesn’t sit well that contraction is on a par with Spain who have been making noise for all the wrong reasons over the past few months. This will more than likely see further monetary easing approved by the BoE in June. This being said there is a fine balance between QE and rapid deflation. While the BoE are keen to meet inflation targets set for 2014, it cannot come at the expense of growth and productivity.

Yesterday’s mass compilation of Grexit strategies by the Eurozone finance ministers has put further pressure on Greek liquidity, so much so that the Greek Stock Exchange dipped to levels unseen since 1990. In response, the ECB has kindly agreed to open its purse strings to the sum of 18bn Euro, to rally confidence. The hope is that now the hordes of cash will come out from under the mattresses and back into the Greek banks. These elections can’t come quick enough.

GBPUSD hit a new 10 week low this morning nudging 1.5640, while sell stops saw GBP perk up in the morning briefly touching 1.5730 before strong economic data in the form of lower US jobless claims and strong PMI figures saw GBPUSD creep back down to the mid 1.56’s.

European equities recovered well, as investors hoped that yesterday’s weak manufacturing data would spur the central banks into action with a stimulus injection.

Very sparse on the data front today with the pick of the bunch being US consumer confidence released at 1.55 GMT.

Have a great weekend and some much welcomed fun in the sun.

Latest exchange rates at time of writing

Indicative Rates Sell Buy
GBPEUR 1.2468 1.2489
GBPUSD 1.5665 1.5690
EURUSD 1.2562 1.2585
GBPJPY 124.76 125.00
GBPAUD 1.6004 1.6029
GBPNZD 2.0708 2.0735
GBPCAD 1.6056 1.6083
NZDUSD 0.7553 0.7579
GBPZAR 12.8648 13.1600
USDZAR 8.2970 8.3400
GBPPLN 5.3930 5.4211
EURJPY 100.17 100.41

Please note these rates are “interbank” rates ie they indicate where the market is currently trading and are not indicative of the rates offered by World First. Rates are dependent on amount transacted. It is important to remember that foreign exchange rates fluctuate all the time. The rate you will receive will depend on the amount and currency you require. Please call 0800 783 6022 or +44 20 7801 9080 for a live quote or login in to your Online Account here.

Company Details

Pressure mounts as UK growth slips

Get a quick quote

Open Account with FC Exchange

FC Exchange are located at:
Salisbury House, Finsbury Circus, Greater London, EC2M 4QQ, United Kingdom

Get a Quick Quote

Newsletter Signup to CMT

Sign up to our foreign exchange newsletter to receive news updates directly by email

Compare Money Transfer will not Share your details!

Bank Exchange Rates Comparison

High St Bank Exchange Rate

All Rights Reserved: Copyright 2006 - 2018 Compare Money Transfer Limited offering FCA Regulated Suppliers - 34 New House, 67-68 Hatton Garden, London, EC1N 8JY. +44 (0) 843 357 4882